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Where is the EU aid to the Palestinian Authority going?

Maurice Hirsch, Adv.  |

In May 2020, Palestinian Authority Chairman, Mahmoud Abbas, declared that the PA and the PLO no longer see themselves bound by the agreements signed with Israel. Implementing this decision, the PA has refused to accept tax monies that Israel collects and transfers to the PA. These funds provide for half of the PA’s annual budget. The unilateral decision to refuse the tax income has once again plunged the PA into a self-made financial crisis. In order to deal with the ramifications of the decision, the PA decided to cut the salaries of all of its civil servants by 50%.

Since the beginning of 2020, the European Union has provided the PA with hundreds of millions of euro in aid. Of that aid, over 90 million Euro was given to the PA, designated, according to EU press statements, for the payment of salaries to “civil servants mostly in the health and education sector in the West Bank.”

In November 2019, European Member of Parliament Carmen Avram submitted written questions to the European Commission seeking to ensure that the EU aid to the PA was not being used to fund the payment of salaries to terrorists. The March 2020 response of the commission explained the mechanism by which the EU ostensibly tracks the final beneficiaries of the EU aid saying:

“The Palestinian Authority provides a list of eligible beneficiaries which is checked by EU-contracted independent auditors against a list of eligibility criteria as well as a second check of individuals considered to be associated with any terrorist organisations or activities. No payments are made to any beneficiaries falling within these categories.”  

According to this answer, the EU thinks it knows exactly which civil servants are the recipients of the EU aid.

Since the EU is providing a considerable amount of funding to these specific civil servants, one would assume that their salaries have not been affected by the PA decision to cut all salaries. But this does not appear to be the case.  

In October 2020, PA Prime Minister, Muhammad Shtayyeh, met with the General Teachers’ Association who demanded that the PA give the teachers beneficial treatment and be paid their full salaries or at least at a higher rate. Shtayyeh rejected the demand.

“[PA] Prime Minister Muhammad Shtayyeh met with members of the General Teachers’ Association yesterday, Thursday [Oct. 29, 2020], in his office in Ramallah, discussed the financial situation with them, and listened to their demands.

The association demanded that the prime minister pay the teachers’ salaries in full or at a higher rate than it is now, and that the banks not deduct the loan payments from the salaries…

The prime minister briefed the association on the general political situation and the successive crises that the occupation is imposing on our people and our cause, particularly the monetary crisis and its consequences on the financial situation…

The prime minister explained that at the beginning of the coming week the salaries will be paid at a rate of 50%, and that the [PA] Monetary Authority has asked the banks not to deduct any [loan] payments. He noted that in the coming months if the crisis does not end and the salaries are not dealt with, the rate of the payments will be increased.”

[Official PA daily Al-Hayat Al-Jadida, Oct. 30, 2020]

The fact that all PA employees have been affected by the PA decision to refuse the tax income, including those who receive part of their salary directly from the EU, should be cause for concern for the EU.

If it were the PA alone funding these salaries, one would be able to understand a decision, across the board, to cut all salaries due to the self-inflicted financial constraints. But, this is not the case, since the EU has contributed almost 360,000,000 shekels (90 million euro) to paying the salaries of specific PA employees just since the beginning of 2020.

If the EU aid is specifically designated for the payment of the salaries of the teachers, why are they not being paid the 50% of their salaries that all the PA employees are receiving PLUS the additional proportional amount from the EU aid?

In other words, the PA decision to cut all salaries, including those of the EU paid teachers, proves the claim that the EU (and really all foreign aid) to the PA is fungible and is susceptible to PA manipulation.

To explain this, consider the following example. Although on average the PA salaries to terrorist prisoners is significantly higher than salaries to teachers, for this example let’s assume the PA pays 100 teachers and 100 terrorists the same monthly salary - 2,000 shekels. Accordingly, the cost for the PA of these salaries would be 400,000 shekels per month. The PA only has income to cover salaries of 300,000 shekels. The monthly shortfall, 100,000 shekels, is funded by the EU aid. Since the PA ostensibly does not use the EU aid to fund the salaries to the terrorists, the PA must use its own resources to do so. Of the PA’s own 300,000 shekels, 200,000 is paid to the terrorists, while the salaries of the teachers are paid only partially by the PA and partially by the EU.

During this period of financial constraints, the PA has continued paying salaries to terrorists. Since the EU aid to pay PA salaries has not gone down, but the PA is paying less in monthly salaries to its legitimate employees, the percentage of the EU aid that is now fungible is even higher than in normal circumstances.

In addition, as exposed by Palestinian Media Watch, the PA seems to have learnt that while the international community may be hesitant to directly support the PA’s terror reward policy, it is willing to fund salaries for PA civil servants. This understanding has given rise to the new PA plan to employ ex-terrorists in the ranks of the PA’s security services and in other PA positions created especially for them. Until now, according to the head of the PA funded Commission for Prisoners and Released prisoners 7,000 – 8,000 released terrorists who spent at least 10 years in prison, have been enjoying generous PA “salary payments” while sitting at home doing nothing.

While the EU claims to have vetted all the recipients of the EU aid, in reality the EU has no clue who are the recipients of their funds. There is no system to which the EU has access in which one could check if a specific PA employee has ever been convicted of committing a terror offense. The only such system exists in the Israeli Military Courts for Judea and Samaria and that system is not accessible to the EU.   

The inevitable conclusion is that without the support of the EU, the PA would not be able to pay salaries to both the PA civil servants, in particular teachers and health workers, and continue paying salaries to terrorists. While the EU would like to argue that its specific aid is not used by the PA to pay financial rewards to terrorists, one would need to be willfully blind to accept that argument. Based on this understanding, the only logical conclusion is that the EU is a willing participant in the PA terror reward policy.  

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